How technology is reshaping the future of logistics

December 10, 2020 4:55 PM

The sector which was estimated to be worth $160-billion in 2018, has been a laggard in terms of technological advancement.

Rivigo had turned unicorn in September 2019 after raising $4.9 million from a South Korean fund KB Platform Fund. (Representative image)

By Sonesh Jain

A few decades earlier, it was hard to find a cellphone signal in India than to find a person. For transporting essentials, truck drivers used to travel 1000-km across the country without any online or offline assistance including a basic calling device. Even in such circumstances, the industry never failed to show immense potential and steady growth. The sector which was estimated to be worth $160-billion in 2018, has been a laggard in terms of technological advancement. That said, there are not one but numerous factors that affect technological advancement in logistics. A major reason is that around 80 percent of Indian truck owners who are non-graduates find it hard to use technology and therefore, are not sold to the idea of investing in electronic gadgets which they can hardly use.

Thankfully now when ‘(4G) Fast Internet’ and ‘Social-Distancing’; have become the new normal, the logistics ecosystem has begun evolving rapidly; in return paved the way to a technologically advanced logistics sector. In
order to minimize physical contact and reduce the stoppage time at the toll plazas, the implementation of FASTag speeded up. It was then when transporters realized that technology is inevitable and extremely important to scale up their profits.

Now let’s have a look at the technologies which are empowering the logistics sector and will continue to become the founding stones of a tech-powered and hyper-active transportation:

Making Decisions at the Speed of Light
One can’t talk enough about technology without mentioning the internet. Officially, India got its internet in 1995 but until 2015, it had a little impact on the trucking industry. Although internet adoption is yet to reach its prime in logistics, the smartphones and laptops coupled with the internet are already helping us make communication easier and faster today. This is simplifying and expediting coordination within cross-functional teams. Besides, it is also providing information visibility in real-time, driving active and real-time decision making. Before 2015, when 3G services and the mobile revolution were just picking up, people were more reliant on calls and meeting physically. Even today, the tools of formal communication like emails (by their construct and tone) look very tedious to transporters. Whereas, simple messaging apps like WhatsApp are actually helping communication at the grassroots.

More direct communication applications took up the lead in the sector. A simpler and effective technology is bound to see rapid adoption. As of now, there are still millions of truckers who are untouched by the internet wave. But when that happens, they will be standing at the gateway of unlimited possibilities. These possibilities will drive logistics into a fast- growing, secure, and time-efficient sector.

Internet of Things (IoT)
It’s not just humans that communicate using technology. Given how the internet is ‘the gateway to numerous possibilities’, devices happen to talk to each other. One of the most known applications of IoT in the logistics sector
is the present toll collection system. As per a report published in 2015, delays at toll plazas cost the country about Rs 60,000 crore a year. In the same year, the government began doing R&D on an e-toll collection system and referred to it as FASTag.

A few years later, the government has mandated the e-toll collection system on all national highways. FASTag will soon become a cashless mode of payment for toll tax and other amenities including fuel. With the implementation of FASTag, the government has managed to save approximately Rs 27,000 crore including the cost of fuel and stoppage time. FASTags are basically small tags that use RFID technology to collect toll payments digitally. These RFID tags are simultaneously communicating with the banks, service provider, and the toll gate. But, at a deeper layer, they are also communicating to the invoicing systems to help automate the expense management for tolls. Such communications take place across several layers of several processes. That’s where the possibilities begin.

Going by the pace, Indian trucks will have sophisticated ECUs to monitor engine and machinery vitals by 2025. We will be able to deploy other solutions such as tire pressure monitors, fuel and oil sensors, location-based sensors, digital locks, cabin monitoring sensors, and alcohol influence detectors for better safety. Similarly, anti-theft systems, anti-collision locks, AR-assisted night driving, digital route memories, truck-specific navigation, and so forth can further add to the value chain. It is noteworthy that we are only talking about the trucking industry and haven’t yet mentioned developments taking place in Air, Rail, and Water transportation or warehousing. There are so many ongoing innovations that are not far from their real-world deployments. We have interesting times ahead.

Enhanced Shipment Tracking (Barcodes)
The barcode technology is perhaps the most underrated one. And maybe that is why one won’t find much on its importance in the future of logistics. In a way, barcodes are the connecting dots between ‘digital’ and ‘physical’. While all the sophisticated software and sensors will help us manifold our rate of growth, the barcodes are actually the ones that will make the delivery happen. Warehouses are where plenty of goods are kept when they are ready to be dispatched. A barcode essentially becomes the unique physical identifier of the item. These barcodes sometimes include codes about its route, warehouse(s), type of goods, etc. And that’s where we have the second layer of barcodes called the identifier barcodes. Then multiple such layers of identifier barcodes eventually converge into one item, for instance, the origin department or city of an item.

As the warehousing industry moves towards unprecedented growth, barcodes will have to become simpler to integrate faster in prints and create economic viability at large. Companies working in barcode technology will be focusing on creating complex hierarchical, tamper-proof, and trackable bar codes. It will solve the case of stolen or tampered bar codes.

A Step Towards Financial Inclusion
Many truckers in India are not a part of the formal economy. Although lending in the commercial vehicle sector has just started gaining momentum, but, even today, given the volatility of the system, banks are risk-averse in their approach. The reason why a particular trucker doesn’t fit the criteria of lending schemes is that transporters have little or no credit history. But with a lot of sensors and software solutions coming in, the industry is generating tons of data. Banks utilize this data to analyze the consequences of lending loans to a particular business.

This analysis was impossible, until just five years ago, due to the lack of data. But all the technology that we use today will leave a footprint to empower truckers tomorrow. As the business will grow or start picking up pace, the business owners will seek out to get funds. Even if the current commercial lending scene is limited to financing trucks and working capital, many other financial services could spring up in the future. So, adopting the technology will make it easier for the banks to reach out to the truckers and drive their financial inclusion.

The role of technology is essential to make trucking more reliable and safer. Time-efficiency, discipline, transparency, the safety of goods vehicle and crew, business success, and a competitive edge are the natural byproducts that follow. Although the future belongs to digital technologies, proactive deployment is what might actually turn the tables here.

(The author is Marketing and Growth Leader at WheelsEye Technology Pvt. Ltd. The views expressed in this article are personnel)

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